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Depreciation for Advance Tax

Vipul Acharya (Account Officer) (639 Points)

09 December 2019

Dear Sir,

For computation of advance tax, whether depreciation under companies act or income tax to be taken

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10 Replies

BE YOURSELF BELIVE YOURSELF (31 Points)
Replied 09 December 2019

Income tax depreciation to be taken......bcz advance tax is also like income tax but which is paid in advance.......hence as we normally take the depreciation as the income tax then it should be taken.

Kapadia Pravin (17249 Points)
Replied 09 December 2019

Advance tax is computed based on estimated business and other income. So profit is estimated and taxable profit is subject to Advance Tax. So it's after depreciation.

Vipul Acharya (Account Officer) (639 Points)
Replied 09 December 2019

As per IT act or Co act plz clarify

Kapadia Pravin (17249 Points)
Replied 10 December 2019

Vipul, it is similar to actual tax computation.
The difference is only that it is estimated figures.

Depreciation of course it is as per Income Tax Act .

sabyasachi mukherjee (26043 Points)
Replied 10 December 2019

@ vipul
there are two aspects
1. while computing profit loss from business .
depreciation is computed as per rates mentioned in Schedule of companies act 2013.
2. estimation is done both as per companies act and income tax.
the profits computed therein will be subject to deduction allowable under the heads of profits and gains of business and professions .
accordingly advance tax is computed and deposited.

I hope all your doubts are cleared.

Kapadia Pravin (17249 Points)
Replied 10 December 2019

Vipul
In addition to my above reply, whatever estimated tax liability comes , please reduce TDS credit , TCS credit and balance after that will be your advance tax liability.

You have to pay advance tax in 4 instalments during FY